1..Corporate taxes Tantor Supply, Inc., is a small corporation acting as the exclusive distributor of a major line of sporting goods. During 2018 the firm earned $ 91,000 before taxes. a. Calculate the firm's tax liability using a flat tax rate of 25%. b. How much are Tantor Supply's 2018 after-tax earnings?

2..Interest versus dividend income. Last year, Shering Corporation had pretax earnings from operations of $ 499000.

In addition, it received $23,000 in income from interest on bonds it held in Zig Manufacturing and received $23,000 in income from dividends on its

4% common stock holding in Tank Industries, Inc. Shering is in the 21% tax bracket and is eligible for a 50% dividend exclusion on its Tank Industries stock.

a. Calculate the firm's tax on its operating earnings only.

b. Find the tax and the after-tax amount attributable to the interest income from Zig Manufacturing bonds.

c. Find the tax and the after-tax amount attributable to the dividend income from the Tank Industries, Inc., common stock.

d. Compare, contrast, and discuss the after-tax amounts resulting from the interest income and dividend income calculated in parts b. and c.

e. What is the firm's total tax liability for the year?

3.

Interest versus dividend expense Michaels Corporation expects earnings before interest and taxes to be $ 43,000 for the current period. Assuming a flat ordinary tax rate of 30%, compute the firm's earnings after taxes and earnings available for common stockholders (earnings after taxes and preferred stock dividends, if any) under the following conditions:

a. The firm pays $12,700 in interest.

b. The firm pays $12,700 in preferred stock dividends.